Gold prices were relatively stable on Tuesday (November 25th), as weaker-than-expected US retail sales data reinforced traders' expectations that the Federal Reserve will cut interest rates in December.

Gold edged down 0.2% to $4,130.85 an ounce at 9:36 a.m. ET (14:36 ​​GMT). Gold prices earlier in the day hit their highest level since November 14th, and rose nearly 2% on Monday after several Fed policymakers signaled support for a third rate cut this year.

US gold futures for December delivery rose 0.8% to $4,127.40 an ounce. "There were renewed expectations for a December rate cut based on the Fed's recent dovish statements, and this doesn't seem to change that," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Retail sales rose less than expected in September, after weakening following a recent string of strong gains. Meanwhile, data showed that for the 12 months to September, the US producer price index rose 2.7% after rising by the same margin in August. The report was delayed due to the 43-day government shutdown.

The market is pricing in an 85% chance of a December interest rate cut—compared to 30% last week—and a 64% probability of a January rate cut, according to CME data.

Federal Reserve Governor Stephen Miran said on Tuesday that the deteriorating labor market calls for further rate cuts, echoing dovish remarks from Fed Governor Christopher Waller on Monday.

Non-yielding gold tends to perform well in low-interest rates environments and during times of geopolitical and economic instability.

More broadly, "the underlying conditions of continued economic uncertainty, geopolitical turbulence, and dovish Fed expectations continue to support gold prices (in the short term)," said ActivTrades analyst Ricardo Evangelista.

Elsewhere, spot silver rose 0.1% to $51.41 an ounce, platinum rose 0.3% to $1,548.80, and palladium fell 0.2% to $1,392.79.(alg)

Source: Reuters.com